Agenda and minutes

Public Speaking: To register your intention to speak at a Council, Cabinet or Committee meeting, please contact Democratic Services on committee@uttlesford.gov.uk or 01799 510410, 510548, 510369 or 510467. Panel, Forum and Working Group meetings do not generally permit public speaking. Please refer to a specific meeting's pdf agenda pack for further information and registration deadlines.

Live Broadcast: For Council, Cabinet and Committee meetings the video player will be available on this page under the Media banner a few minutes before the meeting is due to begin. Please note that Panel, Board, Forum and Working Group meetings are not generally broadcast on the website. The Council uses Zoom and Youtube to broadcast its meetings. Please note that Zoom and YouTube have their own privacy and data security policies, which can be accessed at www.zoom.us and www.youtube.com.

Venue: Zoom

Items
No. Item

23.

Election of a Chair

To elect a Chair of the Investment Board.

Minutes:

Councillor Lodge nominated Councillor Reeve, as the Portfolio holder, as Chair. The nomination was seconded by Councillor Hargreaves.

 

AGREED to appoint Councillor Reeve as the Chair of the Investment Board.        

24.

Apologies for Absence and Declarations of Interest

To receive any apologies for absence and declarations of interest.

Minutes:

Apologies for absence were received from Councillor Criscione.

 

Apologies for lateness were received from Councillor LeCount.

 

There were no declarations of interest.

25.

Minutes of the previous meeting pdf icon PDF 195 KB

To consider the minutes of the previous meeting.

Minutes:

The minutes of the meeting held on 18 August 2020 were approved and would be signed by the Chair as a correct record at the next opportunity.

26.

Exclusion of public and press

Consideration of reports containing exempt information within the meaning of section 100I and paragraph 3 part 1 Schedule 12A Local Government Act 1972

Minutes:

AGREED that under section 1001 of the Local Government Act 1972 the public be excluded for the following items of business on the grounds that it involved the likely disclosure of exempt information as defined in paragraph 3 part 1 of Schedule 12A of the Act.

 

Councillor LeCount and Councillor De Vries entered the meeting at 16:15.

27.

Draft quarterly update report

To receive the draft Uttlesford Property Portfolio Q2 Report.

Minutes:

The Director – Finance and Corporate Services gave a summary of the draft Uttlesford Property Portfolio Q2 Report for the period 1 June – 30 September 2020. He said that in February 2020, the Council had adopted the Commercial Strategy and had allocated £300,000,000 for commercial investment, including that already committed. To date £213,623,374 had been committed with an option for a further £48,400,000 giving a total allocation of £262,023,374 that left £37,976,626 remaining to invest. The net yield of the committed portfolio was 4.82% and this increased to 4.83% when the option items were included. The yield reflected the risk appetite of the Council and the desire for well-known/established brands as tenants.

 

Members asked questions about various schemes outlined within the draft Property Portfolio report.

 

Members received the draft Uttlesford Property Portfolio Q2 Report.

 

Councillor De Vries left the meeting at 16:35

 

28.

Investment Opportunity 12

To consider Investment Opportunity 12.

Minutes:

The Director – Finance and Corporate Services gave a summary of the report, which detailed an investment opportunity that would be built into the 2021/22 budget and modelled into the new Medium Term Financial Strategy (MTFS) that would be prepared as part of the 2021/22 budget setting process.

 

The Director – Finance and Corporate Services summarised the advantages of Investment Opportunity 12. The Council had an opportunity to acquire a forward funding deal for a headquarters building including warehouse and research space in an established location. On building completion the tenant would sign a 35 year lease with no break clauses and a tenant option for a 15 year extension. The build was scheduled to start in January 2021 and would take 19 months to complete.

 

The developer had an option agreement on the site that expired on 31 January 2021 and both they and the tenant were keen to find a funding partner.

 

He said that the Council had had a bid (conditional on formal Council approval) for the freehold investment accepted at £35,000,000 which when the purchaser’s costs of £934,500 had been added gave a total investment of £35,934,500. With rental income of £1,558,000 p.a. this would give a yield of 4.34%.

 

It was suggested that a contingency sum of £2,065,500 be allowed in the approval for additional costs associated with a new build. Any such costs would be reflected in increased rent to continue to provide a 4.34% return on investment. As this was a forward funding deal, the Council would on day one purchase the land at a cost of circa £8,000,000 and would then pay the remaining balance, in monthly sums based on performance and signed off by the Council’s Quantity Surveyor over the life of the build.

 

It was proposed that the funding would be on the same basis as other recent Council investments through £28,000,000 (80%) interest only borrowing and £7,000,000 (20%) fixed repayment loan for 40 years. The total cost of financing once long term and fixed was £334,980 per annum.

 

The risks had been identified and were debated by Members.

 

Concerns were expressed about the credit rating of the guarantor. The Director – Finance and Corporate Services agreed for a review of the credit rating of the parent company providing the guarantee to be undertaken ahead of the request for Council approval.

 

Due to the company’s involvement in the defence market, members debated the need to balance the importance of expanding the Council’s property portfolio with the ethics risks of the investment. During discussion, it was noted that Cllr Khan agreed to work with officers and the Chair, to discuss ideas for the development of an Ethical Investment Policy.  

 

Members called for a recorded vote to be taken. The vote on the recommendations was as follows:

 

 

 

 

 

 

 

For

Against

Abstain

Cllr Bagnall

 

Cllr Khan

Cllr Hargreaves

 

Cllr Sell

Cllr Lavelle

 

 

Cllr Le Count

 

 

Cllr Lodge

 

 

Cllr Pavitt

 

 

Cllr Reeve

 

 

 

AGREED to recommend to Cabinet that:

 

a.    The purchase as set out in  ...  view the full minutes text for item 28.